Biotech Values

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EXEL - BMY

Exelixis licenses two drug programs to Bristol

http://www.reuters.com/article/idCNN1110706720101011?rpc=44

* Bristol to pay $60 mln upfront for two deals

* Exelixis exits development of XL-139

* Bristol waives rights to 3rd cancer candidate

By Deena Beasley

LOS ANGELES, Oct 11 (Reuters) - Exelixis Inc (EXEL.O) has licensed two more experimental drug programs to Bristol-Myers Squibb Co (BMY.N) for $60 million upfront, and potential milestone payments of up to $505 million.

The deals -- for programs in diabetes and inflammation -- bring to five the total number of collaborations between the two companies, Exelixis Chief Executive Michael Morrissey told Reuters in a telephone interview.

Bristol-Myers in June dropped out of a partnership to develop the smaller company's experimental cancer drug XL184.

As part of the latest deal, the companies said they made "minor amendments" to their XL281 and liver X receptor agreements.

In addition, Exelixis has opted to drop out of further co-development of experimental cancer drug XL139 and will receive an accelerated milestone payment.

Under the latest deal, Bristol Myers will be responsible for research, development, manufacturing, and commercialization of a small-molecule drug called TGR5, which targets a bile acid receptor and has potential as a treatment for diabetes.

Under the other part of the deal, the two companies will collaborate on ROR antagonist programs -- with potential in inflammatory disorders -- up to a preclinical transition point after which Bristol-Myers have sole responsibility for further work and potential commercialization.

Exelixis said it is granting rights to the ROR program in exchange for Bristol-Myers waiving rights to receive a third investigational new drug candidate under the companies' 2006 oncology development agreement.

Morrissey, who became CEO at Exelixis in July, said the $60 million upfront payment was included in the company's previous estimate for cash holdings of $250 million at the end of 2010.

"This shows that the company and team is still functioning well in terms of new deals and compounds," he said.